Headwinds from 2018 persist across Asia-Pacific
Singapore recorded the highest year-on-year increase in prime office rents, while Jakarta saw the biggest drop, revealed Knight Frank’s Asia-Pacific Prime Office Rental Index.
Short of mid-sized units, prime offices in the Lion State saw their rents grow 23.7 percent year-on-year on average in the first quarter of 2019.
The Indonesian capital, on the other hand, prolonged its downward trend from 2014 with rents dropping 16 percent annually over the same period.
With a reading of 142.6, the index itself fell 0.4 percent quarter-on-quarter in Q1 2019, although it is up 6.2 percent year-on-year.
“Prime office markets in Asia-Pacific saw a soft start to 2019, as sentiment continues to be dampened by uncertainties following major elections across the region, an unresolved Brexit and the re-escalation of trade tensions between the US and China,” Nicholas Holt, head of research for Asia-Pacific, said.
“The muted start is likely to carry through the year, with moderate increases in rents compared to 2018.”
Fifteen of the 20 cities tracked by the index had stable or increased rents. Trailing Singapore were Melbourne, with an annual increase of 17.1 percent, and Bengaluru with 17 percent.
Melbourne offices continue to enjoy strong demand from co-working operators, which have tripled their footprint in the city over the last 12 months. Solid demand from IT and ITeS tenants has meanwhile bolstered the prime office market in Bengaluru.
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